Saturn Ventures & Advisors Pvt. Ltd. Vs S. Gopalakrishnan & Anr. (NCLAT Delhi)
National Company Law Appellate Tribunal (NCLAT), Delhi, ruled on two appeals concerning the ownership of machinery in the corporate insolvency resolution process (CIRP) of Saturn Rings and Forgings Pvt. Ltd. The case involved appeals by Saturn Ventures & Advisors Pvt. Ltd. and suspended director Satish Gopinath against the rejection of their intervention application and approval of a resolution plan. The primary contention was whether a Wagner 630 machine was part of the corporate debtor’s (CD) assets or leased by Saturn Ventures. The NCLAT upheld the Resolution Professional’s (RP) findings that the machinery was hypothecated to the financial creditor, Bank of India, and had been recorded as an asset of the CD, dismissing claims that it was leased.
The Tribunal examined financial records, loan agreements, and journal entries and found that the machinery was included in the information memorandum and resolution plan only after the RP identified discrepancies in asset ownership. Notably, the CD had claimed depreciation on the machine, which is a right reserved for asset owners under Indian tax laws, as affirmed in Mother Hospital Pvt. Ltd. Vs. Commissioner of Income Tax, Trichur (2018) 13 SCC 92. The Appellate Tribunal found that the CD’s financial statements reflected ownership, and a fraudulent journal entry in 2020 attempted to remove the asset from its books. The court further held that hypothecation of the machine by Saturn Ventures to IndusInd Bank was invalid, as it had already been pledged to Bank of India.
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